State loses $3M Medicaid battle with HHS over restraint-training for nursing home staffers

The Medicare payment system for SNFs has become increasingly broken, a report states.

Pennsylvania must pay some $3 million back to Health and Human Services, after a judge ruled that the state improperly charged Medicare for nursing home staff training.

The U.S. Court of Appeals Third Circuit rejected the state's assertion that Medicaid should pay for its Pennsylvania Restraint Reduction Initiative. That program educates skilled care nurses on how to properly use both physician and chemical restraints, Bloomberg Law reports. Costs for the program were collected from Medicaid between 1996 and 2011.

The alleged improper reimbursement came to light around 2011, when the Office of the Inspector General conducted an audit of Pennsylvania's Medicaid claims.

In its argument, CMS pointed to a 1994 State Medicaid Director Letter that spelled out that training program costs are excluded from the the definition of reimbursable administrative costs under the Medicaid statute. A judge rejected further arguments from the state that the aforementioned letter didn't give sufficient notice to providers that such training costs weren't covered.

Pennsylvania's Department of Human Services must now return $3 million in reimbursement dollars back to CMS due to Wednesday's ruling, Bloomberg reports.

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